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by ARLnow.com Sponsor February 13, 2018 at 11:45 am 0

This regularly-scheduled sponsored Q&A column is written by Eli Tucker, Arlington-based Realtor and Rosslyn resident. Please submit your questions to him via email for response in future columns. Enjoy!

Question: I’ve submitted two offers on home this year and both times lost to multiple offers. Is this normal or is the market more competitive this year?

Answer: 2018 has been a good year for sellers and a frustrating one for buyers already. Generally, I don’t start seeing multiple offer deals until late February/early March, when it starts to warm up and days get longer.

However, about 80% of the listing and purchase deals I’ve been on this year have ended up with multiple offers. I even had a listing that had been on market for three months receive three offers in one weekend. My colleagues who work in new construction and generally have the best pulse on market pace have also been surprised by the amount of activity this early.

Here are some numbers in Arlington from January to back up the anecdotal evidence of a hot market:

  • Supply Down, Demand Up: Monthly of supply measures how long it would take to sell all existing inventory at the current market pace (supply and demand) is down 21% YoY and at its lowest levels (1.31 months of supply) since March 2013 (1.22 months of supply)
  • More Homes Under Contract: Over 200 homes went under contract in January (215) for the first time since 2012 (219)
  • Homes Under Contract Faster: Of the 119 homes that were listed and went under contract in January 2018, 69% went under contract within one week. Over the last five years, 49% of homes listed and under contract in January went under contract within one week.
  • Average Number Of New Listings: The amount of new homes listed on market in January 2018 (234) is about average for what we’ve seen over the last decade

Advice For Buyers

Periods of low inventory and high demand can be frustrating for buyers, so here are a few tips for buyers to create leverage for themselves without simply paying more:

  • Quality Of Lender: Have a pre-approval letter from a strong local lender who has review all relevant documents, not just somebody who checks credit score and asks for basic financial information. A strong lender letter gives the seller confidence you will close on the home on time, without complications.
  • Contingencies: Consider giving up your right to request repairs and credits after the home inspection and using a Pass/Fail contingency instead. This shows that you’re not interested in nickel and diming a seller, but just want to make sure there are no major issues. You can also offer to cover up to a certain dollar amount in the event of a low appraisal, if you are offering to pay above the asking price.
  • Close Faster: Most homeowners want to close as quickly as possible. A good lender can have you ready to close in 20 days vs the more common 30-40 day close.
  • Don’t Play Games: We all want to negotiate a great deal, but oftentimes a great deal is actually having your offer accepted not saving a few thousand dollars. When a seller has multiple similar offers, they often put more weight in who they think is most likely to close with the least complications. In that scenario it pays off to make it clear how much you love/want the home instead of acting like you could take it or leave in an attempt to negotiate a lower price.
  • Days On Market: The number of days a property has been on market should dictate how you approach an offer. You won’t have much leverage in the first few weeks or after a major price reduction.

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by ARLnow.com Sponsor February 6, 2018 at 11:45 am 0

This regularly-scheduled sponsored Q&A column is written by Eli Tucker, Arlington-based Realtor and Rosslyn resident. Please submit your questions to him via email for response in future columns. Enjoy!

Question: A big reason I chose to live in North Arlington and pay the premium that comes with it is because most of the neighborhoods were full of large, mature trees.

I’ve watched over the last 5-10 years as so many beautiful trees have been removed to make room for large new homes, only to be replaced by small trees that don’t survive or aren’t fit for this area. What can we do to educate homeowners about the value trees have in the community and on home values?

Answer: Thank you so much for this question, especially on the heals of a terrific study on Arlington’s tree canopy. It’s one that I don’t think gets nearly enough attention from homeowners, my colleagues in the real estate industry and local government.

The loss of our tree canopy resulting from reckless tree removal by builders who are more concerned with maximizing profit on a single lot than promoting long-term growth of our communities is a major problem for Arlington. In 2017, I wrote an article highlighting the financial benefits to developers who actively work to keep the existing mature trees on a lot so if we can show both short-term and long-term benefits to builders and developers, what do we do?

Don’t Wait On Local Government

For starters, we can’t rely on government policy, but need to work within our communities at a Civic Association level to promote education and understanding. Not every homeowner is concerned about the tree canopy, but everybody is concerned about the long-term value of their home, so we need to educate everybody that the two are not mutually exclusive.

We are never going to stop the replacement of old homes with new ones, but we can support builders who take steps towards tree preservation and discourage residents from working with builders who have no regard for our neighborhoods.

Over the past couple of years, I’ve worked with some fantastic Civic Associations (residents of Williamsburg should be proud of their community leaders!) and the Arlingtonians For A Clean Environment to brainstorm ways to protect our tree canopy and I encourage anybody who has an interest to get involved.

An Education For Homeowners and Builders

I will continue this discussion through my column on ARLnow until we see progress. I hope that readers with an interest in getting involved can share ideas and connect via the comments section.

To kick things off, I want to introduce Heath Baumann, an ISA Certified Arborist with Bartlett Tree Experts, to provide education for homeowners and builders on tree preservation, tree replacement and tree care. Take it away Heath…

Preface

One of the most overlooked assets on a property is often the trees.

Trees not only improve quality of life with shade and beauty, mature trees can affect property value. As Northern Virginia continues to infill and urbanize, trees will face greater amounts of environmental stresses. Larger homes, less permeable surface area, soil compaction and heat island effects can stress both new and mature trees in your landscape.

Your home is comprised of multiple systems such as HVAC, plumbing and electrical. It helps to think of trees in the same manner. Routine maintenance performed by a licensed professional is affordable and extends the life of your trees. (more…)

by ARLnow.com Sponsor January 30, 2018 at 11:45 am 0

This regularly-scheduled sponsored Q&A column is written by Eli Tucker, Arlington-based Realtor and Rosslyn resident. Please submit your questions to him via email for response in future columns. Enjoy!

Question: My property taxes didn’t change much this year, but the County announced that residential home prices increased 3.9%. Are the County’s tax assessments a good way of determining the market value of my home?

Answer: Tax assessments are not a good way of establishing the market value of your home. In fact, if Arlington homeowners used their tax assessment to determine their asking price, on average they’d be undervaluing their home by 10%!

Also, just because the County saw appreciation of 3-4% this year doesn’t mean that will be applied to all homes. Tax assessments are adjusted on a much more localized level based on neighborhood, number of bedrooms, square footage and other factors specific to your home. I would also advise that just because your tax assessment did not increase, doesn’t mean the market value of your home did not increase (and vice versa).

Market Values Higher Than Assessed Values

The following table compares the average sold price (market value) with the average 2017 tax assessment for all homes sold in 2017. I cleaned up the data a bit by removing Co-op sales (River Place), Ballston’s Senior Living Community, new construction (new tax assessments may take a year to catch-up) and a handful of sales that didn’t have a tax assessment available.

Notable Findings:

  • The average Arlington home has a market value 10% higher than its tax assessment
  • Only 14% of homes sold in 2017 sold for less than their 2017 tax assessment
  • The County struggles the most assessing the value of detached homes in Arlington, likely because of how difficult it is to assess land value with due to the proliferation of tear-downs being bought for land only
  • The most under-assessed zip codes were 22213, 22205 and 22204 with homes selling for 12% or more above the assessed value
  • The most accurately assessed zip code was 22201, with assessments coming in within 7.4% of the average market prices

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by ARLnow.com Sponsor January 23, 2018 at 11:45 am 0

This regularly-scheduled sponsored Q&A column is written by Eli Tucker, Arlington-based Realtor and Rosslyn resident. Please submit your questions to him via email for response in future columns. Enjoy!

Question: I’m planning to do some remodeling this year and wondering what sort of colors and design trends you’re expecting in 2018.

Answer: If you’ve been inside a new home or professional flip the last few years, the preference towards white and grey is clear in today’s market. When using neutral colors like this, there’s a fine line between a clean, modern look and being too sterile so I was excited that in 2017 market leaders like Houzz and Sherwin Williams started pushing for warmer tones to offset the cool greys that have become so prevalent.

If you’re remodeling with plans to sell in a few years, you’ll want to put more weight into current buyer trends. So visit some open houses for new construction homes to see what finishes builders are using and balance these with your personal preferences.

If you don’t plan to sell in the near or mid term, focus your decisions on personal preferences and don’t be afraid to go against the grain of the consumer market. There’s a good chance design trends will change anyway by the time you’re ready to sell so don’t compromise your style just because it’s not currently in demand with buyers.

Let’s take a look at what the experts are projecting for design and color trends in 2018: (more…)

by ARLnow.com Sponsor January 16, 2018 at 1:00 pm 0

This regularly-scheduled sponsored Q&A column is written by Eli Tucker, Arlington-based Realtor and Rosslyn resident. Please submit your questions to him via email for response in future columns. Enjoy!

Question: What were the real estate related changes in the new tax plan and how will those changes impact our local real estate market?

Answer: Spending an hour every week working on my taxes in QuickBooks doesn’t qualify me as a tax expert, so before I provide my take, I’d like to introduce local tax expert Molly Sobhani, CPA of Klausner & Company, located in Rosslyn, to break-down the key changes in the new tax plan that will effect how buyers and homeowners make real estate decisions. Following Molly’s explanation, I will provide my personal thoughts and stats, which stand in contrast to most of the opinions I’ve read.

If you would like to follow-up with Molly about the tax bill or any other tax questions, she can be reached directly at [email protected] or (571) 620-0159. Take it away Molly…

After weeks of confusing, convoluted and contradicting proposals introduced by the House and Senate, the Tax Cuts & Jobs Act (TCJA) was signed into law on December 22 by President Donald J. Trump. As the dust continues to settle on TCJA, taxpayers across the country are wading through the tax reform bill and the impact of those changes.

With increases to the standard deduction, changes to the deductibility of mortgage interest and limits on property tax deductions, current homeowners and potential homebuyers have a lot to think about. The housing market will undoubtedly be impacted but how – exactly – is still a big question mark.

Summary of Major Tax Law Changes Impacting Residential Home Ownership

  1. Interest will only be deductible on mortgage debts used to acquire your principal residence or a second home of up to $750,000 (or $375,000 for a married couples filing separately). The phase-out of deductible interest begins after the loan balance exceeds $750,000. This new debt limit applies to all loans incurred after December 15, 2017.
  2. Interest on home equity debt (also known as Home Equity Lines of Credit or HELOCs) will no longer be deductible. This is true regardless of when the home equity debt was incurred.
  3. State and local taxes (also known as SALT deductions) will be limited to $10,000 per year. This category of deductions also includes property taxes paid on homes.
  4. The Standard Deduction has increased substantially from $12,700 for joint filers ($6,350 for single filers) in 2017 to $24,000 for joint filers ($12,000 for single filers) in 2018.

One provision that did not change is related to the capital gain exclusion of up to $500,000 for joint filers ($250,000 for single filers) on the sale of a primary residence. You still must use the home as your primary residence for at least two of the last five years in order to be eligible for the full exclusion.

So why do these new tax provisions make homeownership a trickier decision? The incentives for being a homeowner have now been substantially diminished by the new laws for many taxpayers. (more…)

by ARLnow.com Sponsor January 9, 2018 at 11:45 am 0

This regularly-scheduled sponsored Q&A column is written by Eli Tucker, Arlington-based Realtor and Rosslyn resident. Please submit your questions to him via email for response in future columns. Enjoy!

Question: How did the Arlington real estate market do in 2017?

Answer: In July I wrote that the Arlington market was picking up momentum and after two years of light growth in Arlington, we saw our first year of growth over 2% since 2014 (3.1%). Over 3,100 homes were sold in 2017 compared to approximately 2,900 in 2016 and total sales volume was nearly $2.1B compared to last year’s total of just under $1.9B.

In addition to solid price growth, other momentum indicators improved (if you’re a homeowner/seller) with homes selling nearly one week faster and for ½ percent closer to the original asking price than last year. Price growth and demand were driven almost entirely by South Arlington with 22202, 22204 and 22206 seeing some of the greatest improvement.

Top Sales

  • Once again, the most expensive sale in Arlington was a Rosslyn condo at Waterview with 3,800+ sq. ft. and unobstructed views of the Potomac. It sold for $3,258,000 and took just over a year to sell.
  • The most expensive single family home sold in Arlington was once again in Country Club Hills with nearly one acre for $2,950,000
  • The most expensive townhouse sold in Arlington was also located in Country Club Hills with over 8,000 sq. ft. located on Washington Golf & Country Club and sold for $2,825,000
  • The least expensive home sold in Arlington, not at auction, is a studio condo in The Carlton off Four Mile Run for $115,000

Price Growth: The average price of homes in Arlington has increased every year since 2010, but was slow the last two years. The 22201 and 22203 zip codes continued a steady decline, while 22205 surged forward with an incredible 6.9% YoY increase. Overall, Arlington continues to deliver as promised to most homeowners and investors… steady and stable growth.

Demand Growth: Outside of price growth, my two favorite indicators of demand are days on market (time from listing to ratified contract) and the ratio of sold price to original asking price (100% = buyer paid full ask). Both indicators saw their biggest improvement since 2013 with homes selling faster and for closer to their asking price in seven of nine zip codes. While changes weren’t extreme, they’re enough to say the Arlington market has officially picked up steam heading into 2018.

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by ARLnow.com Sponsor January 2, 2018 at 11:45 am 0

This regularly-scheduled sponsored Q&A column is written by Eli Tucker, Arlington-based Realtor and Rosslyn resident. Please submit your questions to him via email for response in future columns. Enjoy!

I am excited to bring you new real estate topics, statistics and stories in 2018 and would love to hear from you. This weekly column is based around great questions I receive from ARLnow readers so don’t hesitate to reach out with questions, topics or statistics you’d like to read about. Submit via:

Twitter @EliResidential
Facebook @EliResidential
Email [email protected]

I am currently working on a review of Arlington Real Estate in 2017 and a column on how the new tax plan will impact our market, so expect both of those later this month.

Happy New Year Arlington!

If you’d like a question answered in my weekly column, please send an email to [email protected]. To read any of my older posts, visit the blog section of my website at www.EliResidential.com. Call me directly at (703) 539-2529.

Eli Tucker is a licensed Realtor in Virginia, Washington DC, and Maryland with Real Living At Home, 2420 Wilson Blvd #101 Arlington, VA 22201, (202) 518-8781.

by ARLnow.com Sponsor December 26, 2017 at 11:45 am 0

This regularly-scheduled sponsored Q&A column is written by Eli Tucker, Arlington-based Realtor and Rosslyn resident. Please submit your questions to him via email for response in future columns. Enjoy!

I hope everybody had a great Christmas holiday and is enjoying some time off with family and friends this week! Instead of answering a specific question today, I’d like to offer something of a PSA to anybody buying a home right now or planning to in the near future.

There is a lot of wire fraud going on right now brought about by scammers who request wires using email addresses that look like they come from your agent, title company or lender. They hack the email servers of one of the parties to the transaction, identify where a buyer is in the settlement process, and send a technically accurate email with wiring instructions for an Earnest Money Deposit or down payment.

Oftentimes they use a Gmail address, but mask the name so that it says the name of somebody the home buyer recognizes, but in more advanced scams, they use a domain that closely resembles a real one. For example, they may use [email protected] (two “L” in Eli) instead of [email protected]. It seems like most of the people carrying out the scams are familiar with the real estate settlement process because they’re able to communicate with a level of expertise that doesn’t raise any red flags.

Once you wire funds, the money is gone, so if you send a wire to a fraudulent account there’s no getting it back. Your first choice should be to use physical checks for deposits and final payments, but if you have to send a wire, but sure to contact your agent to make sure that the timing of the request is correct and call the receiving party at a known number (e.g. from their website) to confirm the accuracy of the wiring instructions.

Please share this notice with anybody you know in the home buying process. I’ve heard stories of too many people losing large amounts of money this year from these scams and hope this post helps avoid further loss. Until next year friends!

If you’d like a question answered in my weekly column, please send an email to [email protected]. To read any of my older posts, visit the blog section of my website at www.EliResidential.com. Call me directly at (703) 539-2529. 

Eli Tucker is a licensed Realtor in Virginia, Washington DC, and Maryland with Real Living At Home, 2420 Wilson Blvd #101 Arlington, VA 22201, (202) 518-8781.

by ARLnow.com Sponsor December 19, 2017 at 12:30 pm 0

This regularly-scheduled sponsored Q&A column is written by Eli Tucker, Arlington-based Realtor and Rosslyn resident. Please submit your questions to him via email for response in future columns. Enjoy!

Question: Are there certain considerations to be aware of when re-listing your home in the spring/summer market if you listed and then pulled it during the fall/winter market? Are there things that you would need to fix up in a slow winter market that you could let slide in a hotter market?

Answer: You’ve been on the market for months, had a few interested buyers, but nothing has stuck. Now you’re in the midst of the holidays during the coldest and darkest days of the year so you’re asking yourself what every seller is asking… should you pull your listing and wait for the market to heat back up in the spring?

There are three scenarios that I’ll consider advising sellers to take their home off the market during the winter:

  1. You are living in the home, are under no pressure to sell, have been on the market for more than 60 days without an acceptable offer and have exhausted conversations with any buyers who have shown interest.
  2. You have received feedback from agents and potential buyers that the home needs work and you will take time over the winter to make the necessary improvements, providing that the cost of those improvements will net you better terms than an immediate price reduction and avoiding additional carry cost.
  3. A key selling point of your home is landscaping and/or a view that is difficult to recognize during the winter.

Pros & Cons Of Re-Listing

  • Pro: More Buyers… The number of homes that go under contract drops substantially from November-January and picks up quickly in February. On average, the number of new purchase contracts more than doubles by March compared to December and January.

  • Pro: Faster Sales… The increase is buyer activity (demand) results in homes selling a lot faster in the spring/summer

  • Con: Not Necessarily Higher Prices… The increased buyer activity impacts days on market a lot more than it does pricing. The amount somebody is willing to pay or qualified to pay for a home often does not change based on the season, rather larger economic factors.

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by ARLnow.com Sponsor December 12, 2017 at 11:45 am 0

This regularly-scheduled sponsored Q&A column is written by Eli Tucker, Arlington-based Realtor and Rosslyn resident. Please submit your questions to him via email for response in future columns. Enjoy!

Question: Is it true that two-bedroom condos are a better investment than one-bedroom condos?

Answer: If you’re asking this question strictly as an investor, the answer is purely based on the numbers. If you’re buying for yourself, you’ll want to consider appreciation as well as what makes the most sense for your lifestyle. For example, do not spend an extra $150,000 because a two-bedroom will appreciate faster, if you’ll end up using the second room for storage and an occasional guest.

Two-Bedroom Condos Appreciate More than One-Bedrooms Condos

Below is a graph showing appreciation of one and two bedroom condos in Arlington since 2010. To maintain consistency, the data set uses condos built from 2000-2008 limited to one bedroom units with 600-800 sq. ft. and two-bedroom units with 900-1,400 sq. ft.

The average one-bedroom sold for $364,000 in 2010 and is selling for $409,000 in 2017 while the average two-bedroom sold for $529,000 in 2010 and is selling for $638,000 today. If you bought the average one-bedroom in January 2010 with 20% down, you’d have approximately $172,000 in equity today. If you bought the average two-bedroom in January 2010 with 20% down, you’d have approximately $294,000 in equity today by putting an extra ~$33,000 down in 2010.

If You’re An Investor

If you’re an investor, you’re looking at rental income, in addition to appreciation. As I wrote this spring, rental rates have been pretty flat in Arlington, especially along the Rosslyn-Ballston corridor, due to a lot of new rental buildings being built the last 5-10 years.

Based on the average 2010 purchase prices, rental income and a 25% down payment (most common % down for an investor), the average investor along the Rosslyn-Ballston corridor has no cash flow from their investment. The table below does not include maintenance or property management fees and assumes average condo fees, taxes and insurance.

So Why Invest?

Considering that the above monthly cash flow summary does not include maintenance costs, property management fees or vacancy periods where is the value in owning an investment property?

  • Equity Build-Up: For a one-bedroom, your tenants would have contributed an average of $460/mon over the last 8 years ($44,000) to your equity balance and for a two-bedroom, your tenants contributed an average of $680/mon over the last 8 years ($65,000)
  • Tax Benefits: Another major benefit of investing are the tax benefits. Being able to deduct expenses like condo fees, tax payments and repairs. As well as depreciate the value of the condo and provide a huge annual financial benefit to off-set the weak monthly cash flow. A one-bedroom investor may be able to deduct about $20,000 per year and a two-bedroom investor about $30,000. Of course, you’ll want to discuss any deductions with your tax professional first.

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by ARLnow.com Sponsor December 5, 2017 at 12:00 pm 0

This regularly-scheduled sponsored Q&A column is written by Eli Tucker, Arlington-based Realtor and Rosslyn resident. Please submit your questions to him via email for response in future columns. Enjoy!

Question: Can you provide insight into how much a tear-down home costs in Arlington and how lot size effects sale price of a single-family home?

Answer: Breaking News… land is very hard to come by in Arlington. Only 11 homes sold in the last ten years had one or more acres, and it’s going to cost you over $1M to buy one. The average lot size of a single-family home in Arlington is about 8,400 sq. ft. or .19 acres with about 70% of homes on 6,000-10,000 sq. ft. lots.

Here’s a look at the impact of lot size on sold prices of single family homes over the last three years broken out by zip code:

Cost Of Arlington Homes By Lot Size

The data above takes homes of all sizes and condition into account so it doesn’t do a great job of isolating the actual market price of the land or how much people pay for tear-down lots in Arlington.

To summarize that data, I pulled out the cheapest 15% of sales in each zip code over the last three years. I felt that the cheapest 15% of sales in each zip code were probably good bets for homes being bought for the land/location with the intention of tear-down or major renovations. Note: 22209 didn’t have enough sales to include in this table.

Cost Of Land In Arlington

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by ARLnow.com Sponsor November 28, 2017 at 11:45 am 0

This regularly-scheduled sponsored Q&A column is written by Eli Tucker, Arlington-based Realtor and Rosslyn resident. Please submit your questions to him via email for response in future columns. Enjoy!

Question: Are there good loan options available if I don’t have 20% or more to put down?

Answer: There are an abundance of loan products on the market that cater to different professions, down payments and financial circumstances that you should be aware of. “Rate shopping” is easy and moderately effective, but “product shopping” can be much more valuable and something an informed Agent can assist you with. Here are some of my favorite loan programs and the lenders I work with who provide them:

Doctors: Doctor Loan Program from SunTrust: CJ Kemp ([email protected], (301) 651-4189)

The Doctor Loan Program is a residential mortgage loan specifically created for licensed medical professionals to make obtaining mortgage financing easier and more hassle-free. It recognizes the financial toll of medical school and strong, stable future income post-graduation. The rates on these loans are also fantastic.

Eligible Doctors include:

  • Licensed residents/interns/fellows in MD and DO programs
  • Medical doctors
  • Doctors of osteopathy
  • Doctors of dental medicine/surgeons/orthodontics/general dentists (DMD/DDS)
  • Psychiatrist licensed as a medical doctor

Available financing terms include fixed and adjustable rate mortgages for purchases and rate/term & cash out refinances.

  • 0% down up to $750,000 loan amount
  • 5% down up to a $1M loan amount
  • 10% down up to a $1.5M loan amount
  • No mortgage insurance required

Homeowners Buying And Selling: Second Trust/HELOC Program from First Home Mortgage: Jake Ryon ([email protected], (202) 448-0873)

This is a great program for current homeowners who will be buying and selling simultaneously. It allows you to use the future proceeds from your home sale to make a large down payment on your new home, before even putting your current home on the market.

They partner with local banks and credit unions to provide you with a second trust that allows you to put as little 5% down up to nearly a $1,000,000 loan amount. The second trust finances the remaining amount of your down payment (e.g. 15% if you put down 5%).

The HELOC/second trust payment is interest-only, can be paid off any time and can be used like a bridge loan to allow you to purchase a new home without a home-sale contingency and to sell your existing home unrestricted.

Low Down Payment: Mortgage Insurance Payment Eliminator from McLean Mortgage: Troy Toureau ([email protected], (301) 440-4261)

This program enables you to put as little as 3% to 5% down using conventional financing (not FHA) and eliminate the monthly mortgage insurance payment by making a one-time more affordable payment.  This provides multiple benefits including a potential increase in buying power by reducing the Debt-to-Income ratio (lower monthly payment), allowing you to negotiate for the seller to make this payment by rolling it into closing costs, and ensuring that the entire payment is tax deductible (confirm with your tax advisor). (more…)

by ARLnow.com Sponsor November 21, 2017 at 11:45 am 0

This regularly-scheduled sponsored Q&A column is written by Eli Tucker, Arlington-based Realtor and Rosslyn resident. Please submit your questions to him via email for response in future columns. Enjoy!

Question: We are buying a vacation home this winter and wondering how the process and rules differ from our experiences buying our primary residence.

Answer: Buying a vacation home is a little like buying a primary home, but there are key differences you should be aware of. Lenders tend to set more stringent lending requirements and you must be clear about your plans for the property. With these considerations, potential buyers can plan for the financial obligations and time commitments common to the purchase of a second home.

What Counts as a Second Home?

Lenders treat primary residences, second homes or vacation homes and investment properties as unique types of property purchases. Typically, lenders are more likely to grant loans with more favorable terms to people purchasing homes as a primary residence, as the occupation of the home usually ensures a higher degree of timely repayment. Properties that will never be occupied by the owner have different lending and tax obligations. As such, to buy a second home or vacation home, lenders often require you to choose properties that are a set distance away from your primary residence. You must also indicate that you’ll occupy the property for a set amount of time each year.

Vacation Home or Investment Property

Given that a vacation home must be a notable distance from your primary residence, you should consider the type of arrangement that works best for you. Homes suffer from lack of attention, so you should be prepared to make regular visits for maintenance and repairs, or hire a local company to do so. Larger or more remote properties may demand more care, while a condominium in a developed area might require less. You may also choose to rent out the property in your absence to help pay for the mortgage. However, this may affect the classification of the property purchase, and have other tax implications.

Capital Gains Taxes

Selling a primary residence often qualifies the seller to exclude up to $500,000 of the capital gains from their tax liability for a married couple ($250,000 for a single person), but vacation homes are viewed differently. Typically, a homeowner must have lived in the home as a primary residence for at least two of the past five years to qualify for the maximum capital gains tax exclusion.

People who never occupied the home as a primary residence do not qualify for the exclusion and may be required to pay capital gains taxes. Buyers who eventually intend to occupy the vacation home as a primary residence should carefully consider when they plan to sell both properties. For example, a person who sells a primary residence and moves into a vacation home may be able to claim the vacation home as a primary residence, if they occupy it for a minimum amount of time. However, they cannot claim the capital gains tax exclusion more than twice in a two-year period. (more…)

by ARLnow.com Sponsor November 14, 2017 at 11:45 am 0

This regularly-scheduled sponsored Q&A column is written by Eli Tucker, Arlington-based Realtor and Rosslyn resident. Please submit your questions to him via email for response in future columns. Enjoy!

Where Is It? Columbia Forest is a small neighborhood on the western border of Arlington bounded by Columbia Pike to the north, Four Mile Run to the east, S George Mason Dr to the south and the Arlington-Falls Church border to the west.

It is largely considered the most affordable neighborhood in Arlington with detached homes in good condition selling in the $400s and 1BR-2BR condos in good condition selling in the mid $100s. There are also pockets of townhouses and duplexes available. The neighborhood is served by Claremont and Barcroft Elementary Schools, Gunston and Kenmore Middle Schools and Wakefield High School, which is walking distance from every home in the neighborhood.

About The Interviewees: Arthur works for a local University and had previously lived in DC since 1997. Lyz works for Walter Reed in Bethesda and had lived in Annapolis and Gaithersburg. When they moved in 2015, it was the first time either had lived in Arlington and they chose a duplex in Columbia Forest for its affordability and convenience.

Since moving in they’ve added a free library in front of their home (pictured), added a prized garden that keeps their neighbors and friends stuffed full of veggies and painted the exterior of the house. Both Lyz and Arthur are highly active in the civic association and neighborhood programing.

What Do You Love About Columbia Forest? The affordability of it was key and we actually have yard space, which is hard to find at a good price in Arlington. It’s an eclectic neighborhood with a sense of “live-and-let-live” that is difficult to come by elsewhere in Arlington. There’s no overreaching HOA and neighbors are accepting of untraditional landscaping, exterior paint and the individuality of each other.

It’s also a very safe place to live — during a civic association meeting, one of the police representatives said that it’s one of the safest neighborhoods in Arlington. It’s also an inviting community for families and children because there’s not a lot of traffic and plenty of space for kids to play in yards and the street.

Does Columbia Forest Have Its Own Identity? There’s a lot of community here that gives us a sense of belonging to a true neighborhood. We were shocked at how active it is on Halloween for local families and because so many of our neighbors have lived here for decades, there’s a welcoming social scene that we’ve enjoyed becoming a part of. You can tell people here truly care about one another.

We’ve also teamed up with other “West Pike” neighborhoods like Barcroft and Arlington Mill for programing and hosted our fifth annual food truck event in October with over 300 people (Lyz is highly active in this event). Note: check out one of the best neighborhood websites I’ve seen at http://www.columbiaforest.org/. (more…)

by ARLnow.com Sponsor November 7, 2017 at 12:30 pm 0

This regularly-scheduled sponsored Q&A column is written by Eli Tucker, Arlington-based Realtor and Rosslyn resident. Please submit your questions to him via email for response in future columns. Enjoy!

Question: Do you have any details on the new condo building on Columbia Pike?

Answer: The development of Columbia Pike continues westward with the introduction of a very affordable, brand new condo building by Pillars Development Group. The success of recent residential projects, Columbia Place (condos and some townhouses) and Carver Place (townhouses), along the eastern half of Columbia Pike, signal that this will be a successful project for Pillars, who has developed other local condos like The Berkley in Ballston, The Henry in Alexandria and The Paramount in Reston.

What I’m Tracking

The developers decided to make 25% of the units Jr 1BRs, with just under 500 sq. ft., which hasn’t been a very common product in newer construction so I’m looking forward to seeing how these sell. I think it will be a great secondary residence for buyers who live 90+ minutes away and work nearby, as well as the modern value-based buyer looking for affordability and less space.

Unlike most small studio spaces, they have a separate room to sleep (functional bedroom that doesn’t meet legal bedroom requirements) which makes them much more desirable than studios with one large living/sleeping space. The asking price of these units will range from $250k-$300k with monthly condo fees just under $200.

For reference, only 32 condos have sold in Arlington over the last two years for less than $300,000 and monthly fees under $250. The average construction date of those units was 1964, with none being built in the last ten years.

Affordable

Affordability and value are the selling points for Trafalgar Flats (ease of pronouncing the name is not) with 700+ sq. ft. 1BR units selling from the mid to upper $300s and 2BR/2BA units starting in the mid 400s.

The monthly condo fees are also a selling point, coming in about 10-15% lower than the average fee/sq. ft. of other Arlington condos, while still including a gym, lobby, outdoor terrace and bike storage. Above average condo fees were a problem for a lot of potential buyers of Rosslyn’s recent Key & Nash project, which is about 50% sold and about three months from completion.

For reference purposes, there have been 308 2BR/2BA condos sold in Arlington over the last two years for less than $500k and fees under $450/mo., but only three were built in the last 10 years. Bottom line… it’s rare to find value like this in Arlington.

Investment-worthy

There aren’t too many places left inside and around the beltway where you can expect above-market appreciation, but Columbia Pike is one of them, especially the western half now that the eastern section has already seen substantial growth.

At the current pricing and being in the early stages of western Pike development, savvy buyers and investors should pay attention. The property sits just two blocks from the site of the under-development Columbia Pike Village Center, anchored by a Harris Teeter (replacing Food Star), slated to open in 2019. Expect strong ROI from all three options — Jr 1BR, 1BR and 2BR. (more…)

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